BankWest drags on CBA

The "pillar 3" report for Commonwealth Bank, published yesterday, provides some more details on the drag on asset quality created by Bank of Western Australia. This theme was clear in the CBA trading update two weeks ago.

The pillar 3 disclosures show that, at the group level, impaired loans increased 10 per cent to $5.2 billion over the quarter. Past due loans increased four per cent at CBA to $3.1 billion while total provisions increased four per cent to $5.5 billion.

Strife in the BankWest loan book explains most of the rise in impairments at CBA, even though credit exposures at BankWest are only around 10 per cent of the CBA group.

Total credit exposure at CBA was essentially unchanged over the March 2010 quarter at $650 billion. Risk weighted assets declined one per cent to $294 billion over the March 2010 quarter.